Having been the world’s largest economy for more than a century, the US, like the rest of North America and the world, has had a very challenging year in the wake of Covid-19. Here, RLI takes a look at some of the recently completed retail real estate projects in the region and those exciting schemes in the pipeline.
Just under 13.6 million square feet of outdoor retail shopping centre space was returned to market in Q3 2020 as the vacancy rate among community/neighbourhood, power, lifestyle and unanchored strip centres collectively rose from 6.8 per cent to 7.1 per cent in the 65 retail markets tracked by Cushman & Wakefield.
Much has been written about the pandemic accelerating shifts in consumer behaviour, which is certainly true. Cushman & Wakefield’s ‘Marketbeat U.S. National Shopping Center Q3 2020 explains that demand for e-commerce and delivery services has led to skyrocketing growth for those sectors, more than doubling in some categories like e-groceries. As a result, finding omni-channel equilibrium – the right mix between stores and online penetration – will remain a high priority for retailers and a key to determine future success.
The report goes on to say that looking ahead, retail leasing is expected to be strongest among categories that suffered little to no impact by lockdowns, that focus on necessity items, that are value-oriented in their consumer offerings, and that are benefitting from pandemic-related shifts in consumer behavior. Convenience, discount/dollar, drug/grocery, hardware, mass merchandisers/superstores, off-price apparel, pet supplies and warehouse stores all fit into this group. These categories – with the addition of fast food and quick service restaurants – are expected to be among the most active in seeking opportunistic growth opportunities.
PROJECTS ACROSS THE REGION
The Omni by Genesis is a master-planned multi-use commercial destination strategically located adjacent to the burgeoning upper North East Sector of Calgary, offering an unparalleled frontage for commercial profile and visibility to match the stringent locational needs of the top national, regional and local retailers and tenants. Key components of the site are 600,000sq ft of showcase retail, a 325,000sq ft outlet centre, 60,000sq ft of restaurants & cafes, three boutique hotels, a 27,000sq ft children’s creativity zone and 500,000sq ft of office space. Currently under development by Genesis Land Development and being driven by the economic growth of Calgary and Rocky View County, The Omni is well positioned for a multiplicity of uses within this important family-oriented trade region. This comprehensive state-of-the-art development will uniquely integrate seven key pillars of offerings. No opening date is currently available for this mixed-use scheme.
Opened earlier this year and located minutes away from the Las Vegas Strip, AREA15 is the world’s first purpose-built experiential entertainment complex offering live events, immersive activations, monumental art installations, extraordinary design elements, unique retail, ground-breaking technology, bars and eateries and much more. As they enter into AREA15, guests are welcomed by Shogyo Mujo, an interactive 12-foot tall skull covered in 3D projection mapping. Experiences include Haley’s Comet, the first indoor, electric dual-track suspension ride in the US; Birdly, a virtual reality experience that mimics the avian experience; and Art Island, the first-ever permanent gallery for the exhibition of large-scale festival-inspired artwork and many others. Tying everything together is The SPINE, an ever-changing corridor filled with one-of-a-kind art installations, engaging brand activations, unique commerce and inspiring food and beverage offerings. With a growing collection of dynamic destinations including Dueling Axes, Emporium, Lost Spirits Distillery, Oddwood Bar, Wink World, The Beast Pop-Up by Todd English and anchor experience, Meow Wolf’s Omega Mart, AREA15 represents a collaborative venture between real estate development firm Fisher Brothers and creative agency Beneville Studios.
American Dream in New Jersey once again began welcoming guests with the opening of retail and reopening of its indoor entertainment experiences last month. Retailers including H&M, Primark, and Zara will open their American Dream locations for the first time and DreamWorks Water Park, Nickelodeon Universe, Out of This World Blacklight Mini Golf, plus The Rink will reopen at the same time. Developer Triple Five’s major project was dark for almost seven months during the coronavirus pandemic and the mall, which is now 70 per cent entertainment and 30 per cent retail, is still awaiting a full opening, with many food options still being completed and these are expected to open late this year or early next. An inclusive, diverse community that welcomes guests from around the block and from around the world, the American Dream project is an international hub with a global reach that offers entertainment experiences beyond comparison.
The Township project will be approximately 1.5 million square feet of mixed-use buildings when fully developed. The project by developer Royop will feature a number of anchor retailers and a mix of large format retailers, fashion retailers and restaurants as well as smaller service retailers. The area will also feature an existing high school as well as office, residential and hotel opportunities. Current plans are for the project to be constructed over multiple phases. The first phase, which includes 400,000sq ft of retail space, is currently due to be completed in April next year, with multiple phases to follow. The scheme encompasses approximately 60 acres. “It’s not just a spot to shop, but a hub where you’ll want to try the latest in boutique fitness or catch up with friends at your favourite craft brewery,” said Jeremy Thal, Royop’s President and CEO.
Ingka Centres will transform the 6X6 building in downtown San Francisco into a new, circa 25,000sq m retail destination (with a total site size of 35,000sq m) anchored by IKEA and complemented with mixed-use offerings “that are uniquely suited for San Franciscans and their lifestyle”, following its acquisition from MSP Property. The purchase is Ingka Centres’ first in the US and, with an acquisition and redevelopment cost of $260M, 6X6 is expected to open in autumn 2021. “Our urban projects are all about getting closer to our customers,” Ingka Centres’ General Manager, Gerard Groener says: “6X6 is an impressive six-floor glass building with smart, modern design and internal areas that provide the ideal canvas to create something truly spectacular.”
Grandscape, one of the largest and most unique mixed-use development projects in the US and being developed by Nebraska Furniture Market, occupies more than 400 acres in The Colony, Texas. At full build-out, Grandscape will boast three million square feet of retail, entertainment, dining, residential, office and attractions. The 95-acre lifestyle centre portion of the project opened in March 2020, with attractions such as Andretti Indoor Karting & Games, Galaxy Theatres and the largest all sports store in the world, SCHEELS. In an effort to keep this destination vibrant, modern and appealing, it not only features a carefully curated merchandising mix, but also technology, including digital art installations, fountain shows, charging stations, Wi-Fi & warm and inviting architecture with huge trees, pocket parks and more. While 2020 has presented many challenges, Grandscape has opened numerous businesses and recently announced a brand new 1.5 million square foot grade A office park, the British entertainment destination Electric Gamebox and restaurants Curry Up Now and World of Beer as the latest to join, slated to open in 2020 and 2021 respectively.
The completion of the Offices at The Realm signals the first phase of The Realm at Castle Hills, a 324-acre, mixed-use lifestyle destination that includes office, dining, retail, entertainment and multi-family developments. Being developed by Bright Realty, the project is a suburban live/work/play community close to DFW International Airport with plans for outstanding schools, thriving businesses and a variety of affordable multi-family, single-family, town home and condominium products in the Castle Hills community. Future phases of The Realm at Castle Hills currently under construction include Valor at The Realm, 260 apartments above 37,000sq ft of retail space; Discovery at The Realm Phase II, 312 apartments; Sojourn condominiums, 80 units with over 8,000sq ft of retail; Aura at The Realm, 400-plus apartments and an additional 45,000sq ft of restaurant and retail space is to be delivered in 2021.
Gaw Capital USA, a Hong Kong and Los Angeles-based real estate private equity firm, together with DJM, a San Jose and Los Angeles-based private equity real estate developer, have unveiled their vision and plans for the famed shopping centre at Hollywood & Highland, which includes a major design update and new name, Ovation Hollywood. Upon completion in late 2021, Ovation Hollywood will finally be transformed into a vibrant, mixed-use project that includes 135,000sq ft of retail, two floors of nearly 100,000sq ft of creative office space, 85,000sq ft of dining, 65,000sq ft of entertainment space and 40,000sq ft of event space. With an emphasis on a refreshed tenant mix and updated merchandising, DJM is leaning into their retail expertise to bring an updated tenant mix to the property.
Intended as a first of its kind, L&L Holding Company, in partnership with Maefield Development, Fortress Investment Group and the Nederlander Organisation, is creating a full-building promotional platform in Times Square, New York. TSX Broadway will comprise a 51,096sq m, 46-storey tower which includes an outdoor stage suspended nine metres high. The project includes the largest (177 metres tall) and most technologically advanced signage and lighting package available as well as 11 floors of retail and experiential space, a 669-room luxury hotel. The Palace Theatre will be elevated nine metres before undergoing a $50M renovation and modernisation. With fully-integrated retail, entertainment, hospitality, and F&B offerings, TSX Broadway provides the venue for a range of experiences, performances and interaction in the world’s most visible location.
Developers Hines, the international real estate firm, and Columbia Development have announced the start of construction on Fenton, a 69-acre mixed-use development underway in Cary, North Carolina. Fenton will be Cary’s first vertically integrated, mixed-use destination and one of the largest retail-focused projects currently underway in the US. The ground-breaking helps propel the project toward its grand opening in spring 2022. Fenton is located along I-40 and Cary Towne Boulevard, a prominent interstate interchange that occupies a central location in the Triangle. The first phase of Fenton will deliver approximately 345,000 square feet of shops, restaurants and entertainment space, 200,000 square feet of office space, a 175-key boutique hotel and a 357-unit luxury apartment community, The Canopy at Fenton. Hines also announced that Arhaus, the home furnishing retailer with 70-plus locations, had signed a lease for a 17,974sq ft space on-site.
Hudson Yards is New York’s newest neighbourhood and home to more than 100 diverse shops and culinary experiences, offices for leaders in industry, significant public art and dynamic cultural institutions including The Shed, modern residences, 14 acres of public plazas, gardens and groves and the world’s first Equinox Hotel®. The first phase of this project officially opened on 19 March last year, the second phase is not due to complete until 2025. Hudson Yards is a 28-acre mixed-use development on Manhattan’s far West Side, bound by 34th and 30th street to the north and south, and by Tenth Avenue and the West Side Highway to the east and west. The first phase, Eastern Yard, is home to eight new buildings, including residential and commercial skyscrapers, public gardens, a massive shopping mall, and the Shed cultural centre. Though specific design details have yet to be revealed, Western Yard will include additional residential, office, and retail space, as well as an elementary school. When both phases are completed, in 2025 by developers Related Companies and Oxford Properties Group, the development will encompass more than 18 million gross square feet of built space, with nearly 14 additional acres of open public space.